Real Estate

Calgary Real Estate Market - 2021 and beyond

  • Last Updated:
  • Jan 26th, 2023 1:05 pm
Sr. Member
Sep 26, 2007
680 posts
121 upvotes
Toronto
Hi,
I am also interested about the Calgary market.
I just attended a virtual seminar on a preconstruction condo in the Calgary West District by Truman development and price/sqft is approx $550 and they offer a 3 yr guaranteed rental income

I am doing my due diligence as I don't know the Calgary market very well and this 3 yr guaranteed rental income makes me believe that it will be hard to rent a condo unit with 2 bedroom in Calgary.

Any thoughts?
Thanks.
[OP]
Member
Mar 20, 2018
262 posts
165 upvotes
hameljon wrote: Rather than trying to define inner city I'll give some communities that I feel are kind of the next wave of renos.
  • SW - I would say try and stay north of Southland, so Palliser, Chinook Park, Haysboro, Kingsland. Depending on budget maybe Pump Hill or Kelvin Grove, but those are less value plays and on the pricier side.

    Options further north and more west I would say: North Glenmore, Lakeview (I'd be cautious on this one, it's not for everyone given how cut-off it is), Glamorgan (more of a renters community, so it detracts a bit, but some value plays here), Tri-glen area: Glendale, Glengarry and Glenbrook, Signal Hill, Sienna Hills, Westgate. North of 17th, South of 16th and West of Sarcee there's some good stuff as well, but you'll notice it shifts more to that Palliser vibe.
  • SE - Same as above, north of Southland, so Fairview, Acadia, Riverbend. Riverbend has been hot lately among first buyers as a quarry park proxy and stands to benefit from the green line when South Hill is developed. To your question on Ogden, I would agree to a lesser extent, higher degree of vagrancies and a lower income demographic, again it's kind of being on the right side of the road, and in this case SE from Glenmore to 16th is a noticeable shift. Lynnwood (also a green line stop) is shifting a bit quicker than Ogden IMO. Forest Lawn has been turning around a bit and also got a nice lift from the East Hills development, Radisson Heights and Southview are shifting a bit quicker than Forest Lawn as they're more westward. Just keep in-mind that Glenmore to 16th area is going to likely have higher vagrancies and lower income demographic for quite some time, 5-10+ years would be my best guess, but these are great areas for first time buyers.

    I would also say Douglas Dale and Douglas Glen are worth a look, nice lift from Quarry Park. Just be cautious on proximity to Deerfoot for these communities as road noise plays in.
  • NE - There's a small pocket that's fairly desirable due to DT proximity: Bridgeland, Renfrew, Mayland Heights. Renfrew might get a slight lift from Greenline.
  • NW - I find this the hardest to dissect, there's a ton of opportunities throughout almost. Some stand-outs IMO are: Highland Park (greenline), Highwood (greenline), Rosemont (for next wave of infills after Mt. Pleasant), Edgemont, Dalhousie, Varsity is pretty tried and true but getting harder to find value plays. Bowness is another good one that you pointed-out.
One other thing I'll add, look up school ratings. For SW and NW in particular I find this weighs in, immigrant families especially will target communities that have a highly rated designated school.
Excellent post, thanks. One question that interests me is as follows. I don't think the past can always predict the future, but at the same time the past often rhymes with future. That being said, price dynamics of Calgary R/E after the oil crash of 2014 would be a good proxy for value across different levels (location/neighbourhood, home type, etc). Would it be generally correct to say that condos and SFHs in deep burbs were loosing more than other R/E classes in the bear market of 2014-2020?
[OP]
Member
Mar 20, 2018
262 posts
165 upvotes
An excerpt from the Calgary Real Estate Board August Snapshot:

"Market continues shift toward more balanced conditions after torrid start to the year"

"Sales have slowed from the record-setting pace seen earlier this year, but on a year-to-date basis, the eight-month total of 19,516 sales is higher than annual sales figures recorded over the past six years."

"The months of supply in August was nearly three months. This is an improvement relative to earlier in the year".

"The price gains have ranged by product type, with the highest gains occurring in the detached sector of the market".

Detached
"Prices have risen across all districts relative to last year, but prices trended down In the City Centre, North West, West and South districts compared to last month"

Semi-detached
"Sales have improved across all districts in the city, but the largest gains occurred in the West, North West and City Centre"

Row
"The pace of growth in the sector has slowed, but row sales maintained their momentum in August, which was enough to push year-todate sales to a new record high"

Apartments
"As of August, the benchmark price was just over two per cent higher than last year, but it remains nearly 16 per cent lower than previous highs"
Deal Addict
Apr 18, 2017
1051 posts
919 upvotes
Toronto
Isn’t there a large amount of units in Calgary that are vacant right now? A quick search shows that they definitely don’t have shortage of supply so the main thing most investors would be banking on is appreciation, and that in Alberta is pretty much dependent on oil prices.

However, if the # of immigrants are expected to come in as projected, it’s possible that Calgary could see an influx of people in the long run.
Sr. Member
Nov 22, 2017
945 posts
698 upvotes
hockeyfan1990 wrote: Isn’t there a large amount of units in Calgary that are vacant right now? A quick search shows that they definitely don’t have shortage of supply so the main thing most investors would be banking on is appreciation, and that in Alberta is pretty much dependent on oil prices.

However, if the # of immigrants are expected to come in as projected, it’s possible that Calgary could see an influx of people in the long run.
Everything is dependent on jobs. Immigrants are not 2nd class citizens in Canada, once they get here they are free to travel and do as they please after obtaining full citizenship which takes 4 years if I remember correctly. Albertas government messed up royally during their golden years by not diversifying their economy.
Member
User avatar
Feb 27, 2013
257 posts
331 upvotes
Calgary
stanleyinfrared wrote: Excellent post, thanks. One question that interests me is as follows. I don't think the past can always predict the future, but at the same time the past often rhymes with future. That being said, price dynamics of Calgary R/E after the oil crash of 2014 would be a good proxy for value across different levels (location/neighbourhood, home type, etc). Would it be generally correct to say that condos and SFHs in deep burbs were loosing more than other R/E classes in the bear market of 2014-2020?
Yup, I think it would be fair to say condos, row and apartments in deep burps suffered a lot more than other classes. It's even reflected in your excerpt from the CREB today and why I always caution people on multi-family (condos, townhouses, duplexes).

Something has to give here eventually, home prices are still way too inflated IMO and I think we're due for a pullback and have been showing some early signs. I'm personally staying on the sidelines until things cool off a little, there's been some potential deals of interest on the land side but I caution the vast majority of investors on that, generally looking at a longer horizon with a much higher risk profile.
~Let your actions reflect your desires
Member
User avatar
Feb 27, 2013
257 posts
331 upvotes
Calgary
hockeyfan1990 wrote: Isn’t there a large amount of units in Calgary that are vacant right now? A quick search shows that they definitely don’t have shortage of supply so the main thing most investors would be banking on is appreciation, and that in Alberta is pretty much dependent on oil prices.

However, if the # of immigrants are expected to come in as projected, it’s possible that Calgary could see an influx of people in the long run.
Yeah lots of availability on the multi-family side, detached is faring much better but current market is too hot IMO. Alberta is very much still dependent on oil but diversification is happening now, the number of new tech companies and jobs is getting to a significant level in both Calgary in Edmonton, I tend to thing this will lift the multi-family side more than detached though with the typical entry to mid-level tech demographic often living downtown in places like the beltline.

One thing about immigrants is people often under estimate their purchasing power, unlike Westerners multi-generational families in the same household is common so they can create a foothold faster than your average second and third generation Canadian.
~Let your actions reflect your desires
Deal Addict
Dec 19, 2015
3069 posts
1621 upvotes
Calgary, AB
A couple of other things from a liveability point of view.

Weather: Perhaps anecdotal but the NW is generally windier, snowier and seems to get more hail in summer than the SW.

Accessibility: The NW is closer to the mountains and takes less time to get to places like Banff and Lake Louise. If you hike and ski a lot then this should be a factor.
[OP]
Member
Mar 20, 2018
262 posts
165 upvotes
hameljon wrote: Yup, I think it would be fair to say condos, row and apartments in deep burps suffered a lot more than other classes. It's even reflected in your excerpt from the CREB today and why I always caution people on multi-family (condos, townhouses, duplexes).

Something has to give here eventually, home prices are still way too inflated IMO and I think we're due for a pullback and have been showing some early signs. I'm personally staying on the sidelines until things cool off a little, there's been some potential deals of interest on the land side but I caution the vast majority of investors on that, generally looking at a longer horizon with a much higher risk profile.
What exactly do you mean by "prices ... way too inflated"? Are you referring to the Calgary market specifically? I agree that prices have gone too far too fast in Calgary and reached a local top. It is reasonable to expect a light short-lived pullback. But comparing to other major metropolitan areas in Canada, Calgary R/E doesn't look too stretched on the historic scale in my opinion. In many densely populated areas of the country, homeownership (SFH) has become a privilege of the rich. Not the case anywhere in Alberta. I would expect a net positivite interprovincial migration to Alberta in the coming years, especially if oil prices go up more. Even leaving oil aside, Alberta's economy is becoming more diverse. I work in tech and see tech companies moving to Calgary and Edmonton. There is a lot of anti-Alberta sentiment in the media, justified (sometimes) and unjustified (most of the time). But one always has to look at the numbers and ignore the media.
Member
User avatar
Feb 27, 2013
257 posts
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Calgary
Andy34 wrote: A couple of other things from a liveability point of view.

Weather: Perhaps anecdotal but the NW is generally windier, snowier and seems to get more hail in summer than the SW.

Accessibility: The NW is closer to the mountains and takes less time to get to places like Banff and Lake Louise. If you hike and ski a lot then this should be a factor.
Agreed regarding accessibility, although for communities in the SW West of Crowchild and North of Glenmore it's probably only a 5-10 minute difference tops, not something I'd really hang my hat on. The new road infrastructure in the Glenmore/Sarcee area is awesome and has certainly improved accessibility to the mountains for these areas.
stanleyinfrared wrote: What exactly do you mean by "prices ... way too inflated"? Are you referring to the Calgary market specifically? I agree that prices have gone too far too fast in Calgary and reached a local top. It is reasonable to expect a light short-lived pullback. But comparing to other major metropolitan areas in Canada, Calgary R/E doesn't look too stretched on the historic scale in my opinion. In many densely populated areas of the country, homeownership (SFH) has become a privilege of the rich. Not the case anywhere in Alberta. I would expect a net positivite interprovincial migration to Alberta in the coming years, especially if oil prices go up more. Even leaving oil aside, Alberta's economy is becoming more diverse. I work in tech and see tech companies moving to Calgary and Edmonton. There is a lot of anti-Alberta sentiment in the media, justified (sometimes) and unjustified (most of the time). But one always has to look at the numbers and ignore the media.
Yeah I was speaking specifically to the Calgary market, but the same could be said about a lot of the hot markets across Canada right now. I know Calgary arguably still has a lot of room to go relative to Greater Toronto and Vancouver, but I don't think it's fair to think Calgary is just going to catch-up, the city dynamics are just very different and even so, we're already seeing price compression starting in the GTA and Vancouver. Real estate investment relative to total GDP is just crazy high right now with the low interest rate environment and quantitative easing from the government. Only a matter of time before all the supply being built lands and demand is no longer pulled forward, at the same time we'll likely see an end of quantitative easing as pandemic concerns go down which would lead to less liquidity and possible rate hikes.
~Let your actions reflect your desires
Deal Addict
Dec 19, 2015
3069 posts
1621 upvotes
Calgary, AB
hameljon wrote: Agreed regarding accessibility, although for communities in the SW West of Crowchild and North of Glenmore it's probably only a 5-10 minute difference tops, not something I'd really hang my hat on. The new road infrastructure in the Glenmore/Sarcee area is awesome and has certainly improved accessibility to the mountains for these areas.
I live around Glenmore and the road are a total nightmare. I can't wait for them to finally finish construction so I can go back to using the old roads... I honestly don't see any situation where the ring road will actually benefit me (including going to the mountains)..
Deal Addict
Jan 13, 2014
2504 posts
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Calgary
Rental market is up by almost 20-30% as compared to last year. prices themselves are upto 2013-2014 levels. nothing crazy hot or unaffordable yet.
Sr. Member
Apr 7, 2016
666 posts
501 upvotes
Canada
I think realtors are advertising Calgary as next growth market...i doubt this...they are trying to lure all those who can invest to put their money in Calgary and trying to get some projects. I dont think this is a hot market as of now but i may be wrong... definitely returns wont be like GTA or vancouver
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Sr. Member
May 10, 2020
792 posts
1016 upvotes
VictoryBoyxx wrote: I think realtors are advertising Calgary as next growth market...i doubt this...they are trying to lure all those who can invest to put their money in Calgary and trying to get some projects. I dont think this is a hot market as of now but i may be wrong... definitely returns wont be like GTA or vancouver
Investing in Calgary is not like investing in GTA. Its a "normal" real estate market where you look at cap rates, tenants, normal immigration patterns and healthy but surely not heated economy. Its probably the last major city of canada where you can afford a decent/nice detached house for under 500 K (though you can easily break 2 M as well if you wanted - and get a mansion of sorts). It's anchored in oil and gas, but thats O&G is not driving future growth. Its also normal in the sense that summer is more active, fall is a drop off and things pick up in spring and all this happens with normal ebb and flow of inventory. To invest here, you need to spend time to understand the different quadrants, your needs and have a long time horizon. if you want to exit in 3 yrs - dont do it. If you want to exit in 1 yr and / or reassign your condo - definitely dont do it.

What investors in GTA/GVA need to think of Calgary if they want to get in is that unlike GTA/GVA where really anything you bought has gone up in value considerably, that wont happen in Calgary as easily unless there's a massive sentiment shift. And so, to be blunt, one has to use their brains and not fall for Condo developers who are selling at massive premiums to the local markets. The rental guarantee is a smookescreen. The rising tide lifts all is not the modus operandi here. You have to think you are investing in GTA real estate in 2006/07 - from a sentiment standpoint.

If you buy something for 4/500 today say - in the freehold segment - maybe in 6-7 yrs it will become 5/600 and that equates to a 4% ish gain annually. To be conservative, i would even say bake in 2% appreciation. Add in the leverage of cheap rates and you can do the math. If you want it to go from 500 to 1 M like it has in GTA from 2016 to 2021 - dont waste your time and stay away.

However, on the flip side I see some people in Calgary stuck in the same negative sentiment than many people with "renters" mindset had in GTA in 2006/7 where they claimed it was "too hot" or "too pricey" and unfortunately many of these people will be left behind at some point.

https://www.cbc.ca/news/canada/calgary/ ... -1.6163250

I think Calgary is reasonably attractive and most importantly the downside is low - but it is not a short term trading vehicle. Do your homework and make the trip (which is not easy yes), But if you are buying from a plan from an agent in Ontario who will just make money off that sale, its a bad call imo.
[OP]
Member
Mar 20, 2018
262 posts
165 upvotes
Hp4041 wrote: Investing in Calgary is not like investing in GTA. Its a "normal" real estate market where you look at cap rates, tenants, normal immigration patterns and healthy but surely not heated economy. Its probably the last major city of canada where you can afford a decent/nice detached house for under 500 K (though you can easily break 2 M as well if you wanted - and get a mansion of sorts). It's anchored in oil and gas, but thats O&G is not driving future growth. Its also normal in the sense that summer is more active, fall is a drop off and things pick up in spring and all this happens with normal ebb and flow of inventory. To invest here, you need to spend time to understand the different quadrants, your needs and have a long time horizon. if you want to exit in 3 yrs - dont do it. If you want to exit in 1 yr and / or reassign your condo - definitely dont do it.

What investors in GTA/GVA need to think of Calgary if they want to get in is that unlike GTA/GVA where really anything you bought has gone up in value considerably, that wont happen in Calgary as easily unless there's a massive sentiment shift. And so, to be blunt, one has to use their brains and not fall for Condo developers who are selling at massive premiums to the local markets. The rental guarantee is a smookescreen. The rising tide lifts all is not the modus operandi here. You have to think you are investing in GTA real estate in 2006/07 - from a sentiment standpoint.

If you buy something for 4/500 today say - in the freehold segment - maybe in 6-7 yrs it will become 5/600 and that equates to a 4% ish gain annually. To be conservative, i would even say bake in 2% appreciation. Add in the leverage of cheap rates and you can do the math. If you want it to go from 500 to 1 M like it has in GTA from 2016 to 2021 - dont waste your time and stay away.

However, on the flip side I see some people in Calgary stuck in the same negative sentiment than many people with "renters" mindset had in GTA in 2006/7 where they claimed it was "too hot" or "too pricey" and unfortunately many of these people will be left behind at some point.

https://www.cbc.ca/news/canada/calgary/ ... -1.6163250

I think Calgary is reasonably attractive and most importantly the downside is low - but it is not a short term trading vehicle. Do your homework and make the trip (which is not easy yes), But if you are buying from a plan from an agent in Ontario who will just make money off that sale, its a bad call imo.
Gains in the GTA (and SW Ontario for that matter) R/E market created unrealistic expectations when it comes to real estate. It is reasonable to expect that things will revert to the mean in Ontario (hence, lower expected returns compared to the past). We will see how things evolve, but I agree with you that the biggest advantage of the Calgary market is low downside. Prices are now are at the 2014 level. If we adjust for the 20% increase in monetary supply due to COVID, prices become even more attractive.
Sr. Member
Aug 20, 2019
505 posts
324 upvotes
Any advice on pre-cons condos from 150s to 250s for investment purposes and rentals?

Seems too cheap for a major city to still be at this price with only a 5% down needed for purchasing and having a few years before needing to get that mortgage...

I am seeing some condos 2b+2b for 250s, just screaming value to me in the long run.
Let the hoarding begin.....
Deal Addict
Nov 26, 2004
3815 posts
2996 upvotes
Johntheshopper wrote:

I am seeing some condos 2b+2b for 250s, just screaming value to me in the long run.
I think these rental programs is bogus as the builders are essentially returning buyers money by charging them an inflated initial sale price. Yes they have these guarantee rent programs, but these units are overpriced by $50k to $60k over comparable units in the link below.

https://www.realtor.ca/real-estate/2362 ... view-ranch

The difference roughly works out to the rent that they are paying back via the rental program. So any rents the builder can actually collect from the tenant is just gravy.

Personally, I would just pay more to get a freehold or if there is a budget ceiling, I will just go with a condo unit at their real market value.
Sr. Member
Aug 20, 2019
505 posts
324 upvotes
William W wrote: I think these rental programs is bogus as the builders are essentially returning buyers money by charging them an inflated initial sale price. Yes they have these guarantee rent programs, but these units are overpriced by $50k to $60k over comparable units in the link below.

https://www.realtor.ca/real-estate/2362 ... view-ranch

The difference roughly works out to the rent that they are paying back via the rental program. So any rents the builder can actually collect from the tenant is just gravy.

Personally, I would just pay more to get a freehold or if there is a budget ceiling, I will just go with a condo unit at their real market value.
From what I've seen NE, is just cheaper generally. I was looking at NW areas.

something like this

https://www.zillow.com/homedetails/80-S ... 3784_zpid/
Let the hoarding begin.....
Sr. Member
May 10, 2020
792 posts
1016 upvotes
Johntheshopper wrote: From what I've seen NE, is just cheaper generally. I was looking at NW areas.

something like this

https://www.zillow.com/homedetails/80-S ... 3784_zpid/
What you have to keep in mind is that condos even Toronto were not great at appreciation for ages till the land pressure became immense and they took a life of their own. In Calgary, there isn’t land pressure - so for the condo inventory to lighten, you need freeholds to get much tighter now. In Toronto or even gta, a 2 bed is the new starter house because the price is around 700 ish in the burbs and maybe 950+? In the core. In Calgary, a 2 b condo is on average around 275 ish and a small house even in nw - a semi or even at times a semi in elbow park etc is under 400. So it’s very far from the point of becoming the preferred living space for families that make the bulk. It can still be a good investment possibly - but appreciation is a long ways away.

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